An introduction to incentive-centered design (ICD)
Often problems are not solved because the system chosen for solving the problem is not in alignment with the thought patterns of the decision-maker. This is where something called incentive-centered design comes into play.
Incentive-centered design (ICD) is the science of designing a system or institution according to the alignment of individual and user incentives with the goals of the system.
By using incentive-centered design, system designers can observe systematic and predictable tendencies in users in response to motivators to provide or manage incentives to induce a greater amount and more valuable participation. ICD is often considered when designing a system to induce desirable behaviors from users, such as participation and cooperation. It draws from principles in various disciplines including economics, psychology, sociology, design, and engineering. ICD has been gaining attention in research communities due to the role it can play in helping systems benefit their users and ultimately achieve better results.
A person committed to this idea must rely heavily on the knowledge of others. We must first understand knowledge within the context of their understanding of reality in order to apply it successfully. We cannot let the fear of the unknown or the irrational demands or expectations of others to interference in our judgment — not if we want to create and live the best life that we possibly can. Being extraordinary requires a dedication to logic and reason intuition, the freedom to act on one’s choices, and the wisdom to seek wise counsel. More than anything else, an effective Support Triangle makes life more abundant.
A recommended film to reinforce the key points of this post is Quest for Fire. The film explores a number of key elements in decision making, community, and reciprocal altruism all within the context of a vision quest.
Most of us see cause and effect as a linear sequence, i.e. a chain reaction as one might observe as one domino falling on another and that on another and so on. This is why a reaction such as this is called a “domino effect”. However, cause and effect can get much more complex with
-Black Swan Effects; an event that comes as a surprise, has a major effect and is often inappropriately rationalized after the fact with the benefit of hindsight.
-Butterfly Effect; the sensitive dependence on initial conditions in which a small change in one state can result in large differences in a later state.
-Tipping Points; the point at which a series of small changes or incidents becomes significant enough to cause a larger, more important change.
With this potential for complexity in problem-solving, it is invaluable to have a wise and skilled support group behind you.
This story was created from my seminar notes for Harrison’s Applied Game Theory. To follow all of my longer, Great Game Theory Guide postings and stories, check out the full Table of Contents at:
Game theory has won numerous Nobel Prizes including the 2020 prize in Economics.
If you have an interest in learning more about applied game theory you can begin with this short introduction to the basics of game theory. Below is an article (a 6-minute read) as well as a more in-depth video embedded in the article. Both were created so they would be understood by 12-year-old.
Using all of the gaming skills you have learned from the sandbox, through Rubick’s Cube, and now into video games and sports will change your life in every way, for the better.
The Article: Click on the title ‘the Best Introduction…’ just below.
If you are still a bit confused about how to apply game theory in your daily life watch the 15-minute video interview with me below, Just click on the URL.
We also offer a course in Applied Game Theory.
Click on this URL link below and explore the course.